Bibb County and Macon officials hope to use a big chunk of sales tax money to pay off existing debts.

If voters approve of a special purpose local option sales tax Nov. 8, more than a quarter of the sales tax proceeds will flow to existing debt, and more SPLOST money would pay for newly leased equipment.

“It’s saving $10,200,000 per year out of the general funds, combined,” said David Lucas, a senior vice president with Sterne Agee who has been advising the governments.

If passed, SPLOST money would take over much of the interest and principal payments for the existing debt. It would pay off a majority of each government’s existing debt, using about $44.7 million in SPLOST money.

But because some of the bond issues would be paid off entirely, governments would save money for years after the SPLOST expires. Lucas’ figures suggest the sales taxes would save $7.5 million in county government interest costs overall, and another $5.4 million in city government interest, a total of about $12.9 million.

A Macon State College study estimated the overall savings in interest would amount to some $13.7 million, but may have included some debt issues that won’t be retired.

In all, $14 million in Macon debt and $30.7 million in Bibb County debt is expected to be addressed with SPLOST money. Some of the remaining debt has low interest rates, such as 0.2 percent. To build SPLOST projects faster, the referendum would also draw some short-term debt with interest rates of about 2 percent, Lucas said.

Tax help without tax refunds

Neither the Bibb County nor Macon governments have formally decided what would happen to the $10.2 million in savings to their general funds.

The Bibb County government would average about $5.7 million in annual savings to its general fund if SPLOST money relieves debt payments. Macon would see a savings of about $4.5 million, Lucas’ figures show.

Still, don’t expect a property-tax cut any time soon.

Officials say instead, SPLOST and its debt-relief benefit could defer property-tax increases for a variety of reasons.

“It may reduce the chances of a millage rate increase, because if you’re able to keep that money in the general fund, not to have to pay it out in interest, then you are reducing the chances” of service cuts or millage rate increases, Reichert said.

A 2-percent inflation rate means the city has to find another $1.5 million every year just to keep pace with costs, Reichert said.

Bibb County needs the cash flow to control its budget, said Commission Chairman Sam Hart.

“All of it will be used to hold the property taxes down, in my opinion,” Hart said.

If the SPLOST passes, the county faces increased costs for recreation, engineering and animal control operations.

Other elected officials say the governments should consider using the cash to rebuild cash reserves.

City Councilman Tom Ellington said the city needs to save in better times to prepare for worse times. The city’s reserves are perhaps $6 million when they should be more like $18 million, he said. He said he’d be cautious about spending money.

“I’m not accustomed to thinking about windfalls, and I think we’d want to think about those as cautiously as we think about shortfalls,” Ellington said.

Bibb County Commissioner Lonzy Edwards thought about replenishing the county’s reserve fund and helping with employee pay. Bibb County deputies now start at $25,688, less than competing counties.

“We need to sit down and have a conversation in the county commission about our priorities,” Edwards said, “because there will be a lot of people lining up to claim their share of it.”

Among those hoping to claim money would be taxpayers, who had received a Bibb County SPLOST-back refund in recent years.

Some taxpayers saw this year’s 20-percent property tax rate increase not as the end of the refund, as county commissioners argued, but as an unjustified tax increase.

To contact writer Mike Stucka, call 744-4251.